Photo courtesy of The Verge.
Summary: To compete with Google and Facebook’s digital marketplaces, AT&T will purchase AppNexus.
On Monday, AT&T confirmed that it will purchase AppNexus. According to TechCrunch, the communications giant will more than likely spend $1.6 billion to $2 billion for the acquisition, although AT&T would not comment on the financial details.
“Another legacy carrier built on offering phone services is now taking a deeper dive into the world of advertising and specifically ad tech to help catapult itself into the next generation of tech and communications. Today, AT&T confirmed that it is buying AppNexus, a programmatic advertising marketplace that competes against the likes of Google and Facebook and describes itself as the world’s largest independent digital ad exchange,” TechCrunch said.
Monday’s announcement follows speculation from last week that AT&T planned to purchase AppNexus. This news came only weeks after the merger between AT&T and Time Warner was approved by the government. That merger was worth nearly $85 billion.
The AppNexus deal is expected to close in 2018.
TechCrunch said that AppNexus is valued between $1.5 billion and $2 billion. The company had previously raised $344 million from investors that included News Corp. and Fidelity, and it has said that 34,000 publishers and 177,000 brands use its marketplace.
“Ad tech unites real-time analytics and technology with our premium TV and video content,” said Brian Lesser, CEO of the division at AT&T. “So, we went out and found the strongest player in the space. AppNexus has scale of infrastructure, advanced technology and diverse talent. The combination of AT&T advertising & analytics and AppNexus will help deliver a world-class advertising platform that provides brands and publishers a new and innovative way to reach consumers in the marketplace today.”
AppNexus will add 400 engineers and existing IP into the AT&T portfolio. The company provides publishers with tools to automate ad sales.
“Innovation is core to the heritage of both AT&T and AppNexus, and we have an exciting opportunity to chart the future course of advertising together,” said Brian O’Kelley, CEO, AppNexus, in a statement. “Combining AT&T’s incredible assets with our technology, we will help brands and marketers power new advertising experiences for consumers. It’s what the market is asking for, and together we’re poised to deliver it.”
Ad Age stated that Lesser was open with his plans to compete with Google and Facebook, which are currently dominating the digital ad space. Last week, he appeared at Cannes and spoke about his vision for AT&T.
“The future state of the ad business is a platform business,” Lesser said. “Google and Facebook prove that platforms rule. When you make it easy for advertisers to efficiently buy at scale and generate performance, that’s what they will choose.”
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